Apr. 26, 2003 - 20:29 MDT

THE WONDERING JEW

Golden Goose

Article in the Rocky Mountain News April 26 by Michael Liedtke of the Associated Press. Headline "Big checks for execs." I won't do much but quote a few things here. Mr. Liedtke says, "Salaries and bonuses represent just a small part of the generous compensation packages for top executives at many of the nation's largest companies. Stock options, restricted stock awards, enhanced pensions and long-term incentive plans also elevate executive pay." Mr. Liedtke goes on, "For example, at defense contractor Honeywell Internaional, recently hired CEO David Cote's 2002 compensation package included $3.56 million in "other annual compensation" on top of his salary and bonus of $3.17 million. The peripherals included: $118,667 to pay Cotes legal bills, $61,475 for his personal use of corporate aircraft, $60,300 for temporary housing, $28,944 for personal use of a company car, and a $2.7 million "make whole" payment to cover a bonus Cote would have received had he not resigned from TRW Inc. to take the Honeywell job. Honeywell also reimbursed him $394,903 for some of the taxes he incurred from all the extra income. Cote is also scheduled a $2.3 million "make whole" payment this year.

Meanwhile, Honeywell's stock droped 29 percent between Cote's February 2002 hiring and the end of the year, wiping out $7.7 billion in shareholder wealth."

There are other corporations following the same trend, Honeywell is not the only one. That is what was in the paper this morning.

It seems to become more recognized that the system is way out of kilter. As long as things were booming maybe no attention was really paid to the bonanza of the biggies. The excuse being, "We have to pay big bucks plus perks to get a good CEO."

Then comes Enron and other corporate scams which upped the apparent volume and value of income by shifty bookkeeping and then the down turn in the economy began to grind its gears. Consumer confidence and investors confidence began the downward slide too it seems to me.

I cannot come close to putting out a formula for CEO and big execs recompense but can make a guess or two, one sweeping move would be to tie the execs recompense to the actual profit the corporation is making. Profit goes up, recompense goes up, profit goes down, recompense goes down. Another thing I think should be put into force, a CEO's recompense should be pegged to x-times the lowest paid managers salary. Another thing, bonuses should be given only to those who did some outstanding thing to add to the corporations profitable existence -- no group bonuses unless the whole group was instrumental in the success. No bonus to the top dog unless it was his brilliant leadership that caused it. To me bonuses should be awarded for achivement above and beyond the call of duty. Another thing that I think should be avoided is giving stock options and other add ons to the salary. Use of a reasonable car (Not limousine) should be furnished by the corporation, as should be use of the corporate aircraft for business only. Moving expenses seem to be out of sight now, they should be only the actual expense involved and not include moving a palace, its grounds and the village surrounding it. All this other wheeling and dealing should be against the law to avoid the hanky panky going on now. To me a CEO getting the kind of loot they do nowadays when the corporation is losing money is criminal.

I noticed in the news lately that Lay has sold his Aspen Colorado real estate, or at least most of it. Millions were involved, wonder if he will pay any of that back to the 401.k losers ?

I think a diet should be considered for the Golden Goose . . . . . . . . . . .

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